It also alleges that VW “violated” clean air laws by selling cars that were different in design from those originally cleared for sale by the EPA.

“With today’s filing, we take an important step to protect public health by seeking to hold Volkswagen accountable for any unlawful air pollution, setting us on a path to resolution,” said assistant administrator Cynthia Giles for the EPA’s Office of Enforcement and Compliance Assurance.

“So far, recall discussions with the company have not produced an acceptable way forward. These discussions will continue in parallel with the federal court action.”

The department said the filing was just the first step in “bringing Volkswagen to justice”.

VW is also facing separate criminal charges, and a raft of class-action lawsuits filed by car owners.

The EPA says that VW fitted many of its cars with a device that was able to recognize test conditions and adjust the engine settings accordingly, with the express purpose of giving distorted readings on nitrogen oxide emissions.

VW admitted to “totally screwing up”, and there has been a shake-up in the management structure and personnel as a result. Martin Winterkorn resigned as CEO and was replaced with Matthias Muller, the former boss of Porsche.

The company is currently conducting an internal investigation that it says will “leave no stone unturned”.

VW will begin recalling millions of cars worldwide soon, and has set aside €6.7 billion to cover costs. That resulted in the company posting its first quarterly loss for 15 years, of €2.5 billion in October 2015.

With the lawsuits piling up, experts say the final costs for VW are likely to be much higher than that.

Separately, the man tipped to become VW’s North America boss has resigned.

VW said Winfried Vahland was leaving because of “differing views on the organization of the new group region”.

The automaker gave no details of the recall and said it would contact individual customers directly.

VW added that it was working on solutions to fix the recalled cars “at full speed”.

Last month, authorities in the US discovered some VW diesel cars had been fitted with a device to cheat emissions tests. VW subsequently admitted that up to 11 million cars worldwide could have the device fitted.

VW has launched a thorough investigation into the scandal, but new chairman Hans Dieter Poetsch has warned that answers would take “some time”.

The company has set aside €6.5 billion ($7.4 billion) to cover the costs of the scandal, but some experts believe the final bill could be much higher.

VW shares recovered slightly last week but are still down almost 20% since the scandal broke in mid-September.

Separately, the man tipped to become VW’s North America boss has resigned.

Volkswagen said Winfried Vahland was leaving because of “differing views on the organization of the new group region”.

Last month, authorities in the US discovered some VW diesel cars had been fitted with a device to cheat emissions tests. The automaker subsequently admitted that up to 11 million cars worldwide could have the device fitted.

VW has launched a thorough investigation into the scandal, but new chairman Hans Dieter Poetsch has warned that answers would take “some time”.

The company has set aside €6.5 billion ($7.4 billion) to cover the costs of the scandal, but some experts believe the final bill could be much higher.

VW shares recovered slightly last week but are still down almost 20% since the scandal broke in mid-September.

On September 18, the US Environmental Protection Agency (EPA) said VW diesel cars had much higher emissions than tests had suggested and that software in several diesel cars could deceive regulators.

“Volkswagen does not tolerate any kind of violation of laws whatsoever,” the carmaker said in its latest statement.

VW said provision for the scandal would be made “in the profit and loss statement in the third quarter of the current fiscal year”.

It added: “Due to the ongoing investigations, the amounts estimated may be subject to revaluation.”

French Finance Minister Michel Sapin has called for an EU inquiry, but a UK car industry spokesman said there was “no evidence” of cheating.

However, he also described current testing methods as “outdated” and said the car industry wanted an updated emissions test, “more representative of on-road conditions”.

Minister Michel Sapin said inquiries in Europe had to be conducted “at a European level”.

“We are a European market with European rules,” he told Europe 1 radio.

“It is these that have to be respected. It is these that have been violated in the United States.”

The French carmakers’ federation backed Michel Sapin’s call, saying such an inquiry would “allow us to confirm that French carmakers respect the procedures for approval in all of the countries where they operate”.

However, a European Commission spokeswoman said it was “premature to comment on whether any specific immediate surveillance measures are also necessary in Europe”.

Elsewhere, the South Korean government said it would test up to 5,000 Jetta and Golf cars, along with Audi A3s made in 2014 and 2015.

Its investigation will be expanded to all German diesel cars if issues are found.

The White House in Washington also reportedly said it was “quite concerned” about VW’s conduct.

Volkswagen was ordered to recall half a million cars in the US on September 18.

In addition to paying for the recall, VW faces fines that could add up to billions of dollars. There may also be criminal charges for VW executives.

In its latest statement, VW said it was “working at full speed to clarify irregularities” concerning what it called “a particular software used in diesel engines”.

The EPA found the “defeat device”, the device that allowed VW cars to emit less during tests than they would while driving normally, in diesel cars including the Audi A3 and the VW Jetta, Beetle, Golf and Passat models.

VW has stopped selling the relevant diesel models in the US, where diesel cars account for about a quarter of its sales.

The EPA said that the fine for each vehicle that did not comply with federal clean air rules would be up to $37,500. With 482,000 cars sold since 2008 involved in the allegations, it means the fines could reach $18 billion.

VW has ordered an external investigation, although it has not revealed who will be conducting it.

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